Motor vehicle warranty insurance is an insurance policy designed to minimise the cost to you of replacing or repairing motor vehicle parts in the event that they are faulty or damaged, subject to specific limits.

If a vehicle meets certain qualifying criteria, a vehicle warranty can be purchased for various periods ranging from 6 months to 36 months. In some cases, a warranty may be purchased prior to the expiry of the manufacturers extended warranty so that the customer maintains continuity in their protection.

Most warranties require that the vehicle is regularly serviced and maintained as required by the manufacturer, and if a part needs replacing or repairing it can generally be done anywhere in Australia.

The specific items and benefits covered by a vehicle warranty can vary dramatically so it is important that you review the policy wordings carefully or seek independent advice.

Where AMC sells a warranty on behalf of a warranty provider, the warranty is fully underwritten as it is deemed to be a financial product under the Corporations Act 2001.

In some instances dealers will sell a non-underwritten warranty, generally known as a Service Contract. Services Contracts can only be sold to you by the dealer or owner of the vehicle as part of a contract of sale and must only cover the costs resulting from the breakdown of the vehicle or its parts, otherwise it may be deemed an insurance product. Under the FSRA legislation, a third party, such as AMC, is not to sell or finance a Service Contract, even if it may indicate some form of insurance underwriting.

Benefits of a Vehicle Warranty

• Protects the borrower’s finances in the event of faulty or damaged motor vehicle parts, particularly with the average cost of repair increasing.

• Offers financial security in the event of the unfortunate occurring.

• Fully underwritten warranties can be separately financed into most loan contracts.

• The wide range of warranties allows a customer to select the level of cover they are comfortable with.

• The customer’s vehicle remains covered even if the finance contract is finalised.

• Additional items such as towing costs, car hire and accommodation are often included.

• Most warranties permit the transfer of ownership for a small fee, subject to advising the administrator.

• The vehicle remains in good condition as warranties require the regularly service of the vehicle.

• Log books are kept up to date which improves the saleability of the vehicle.

• Warranty products can be cancelled and the premium rebated on a pro-rata basis so the customer only pays for the portion of the cover at risk while the policy is current.